Back registration for VAT and its tax impact

Natalia Błażejewska
Puls Biznesu

The Supreme Administrative Court ruled on 15 November 2022 in case number I FSK 95/19 in a way that gives hope for a change in how the tax authorities approach the effect of a back registration for Polish VAT (registration with backdated start of Polish business) on the treatment of transactions already reported and accounted for under the reverse charge mechanism. Previously the Polish tax authorities claimed that, in such a situation, the transaction must be adjusted and the supplier has to charge VAT on it because the reverse charge requirements are no longer satisfied. But the top court’s November 2022 judgment shows that the act of registration operates prospectively only. Moreover, the court made a point of noting that satisfying the reverse charge requirements exempts the supplier from VAT liability on the transaction and this exemption is definitive, with even a subsequent VAT registration of the supplier not changing that.